← HOOD forward model

HOOD · Forward model · Options · Bear case

What has to happen in Options

Model as of

This page changes Options inside the complete HOOD model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

HOOD forward model
Horizon
Consolidated fair value $31.63 all other verticals held in this portfolio case
Final-quarter revenue $615M 34% of company revenue
Explicit segment contribution $4.79B EBITDA less segment capex, before corporate items

Payment for order flow is capped or banned and takes the rate out of options and equities together. Sports event contracts lose their fight with state gaming regulators and the second-largest transaction line stops rather than slows. Rates fall faster than balances grow, so net interest shrinks. Crypto keeps bleeding at July's pace rather than the model's, and the multiple compresses to what a cyclical broker is worth.

Options

Basis quarter$342M
Final quarter$615M
Implied CAGR+12%
Final revenue mix34%

Still the single largest product: 774 million contracts in 2026 Q2 at roughly 44 cents of revenue each. The most durable of the transaction lines because it is a habit rather than a trade - options volume held up through the crypto collapse of the last two quarters, and Robinhood keeps taking share.

Last four quarters
2025 Q3 $304M Reported
2025 Q4 $314M Reported
2026 Q1 $260M Reported
2026 Q2 $342M Reported
Single-leg and multi-leg options order flowOptions market-maker rebates
Units 774/qtr growing +6.0% per quarter 774 million contracts in 2026 Q2, a record, as reported. The unit here is one million contracts.
Price per unit $442000 drifting −0.5% per quarter $442,000 per million contracts - $342M over 774M contracts, or about 44 cents each.
Options

Latest: $615M (2031Q2E)

Period Value
2025Q1 $240M
2025Q2 $265M
2025Q3 $304M
2025Q4 $314M
2026Q1 $260M
2026Q2 $342M
2026Q3E $352M
2026Q4E $362M
2027Q1E $372M
2027Q2E $383M
2027Q3E $394M
2027Q4E $406M
2028Q1E $418M
2028Q2E $430M
2028Q3E $443M
2028Q4E $456M
2029Q1E $470M
2029Q2E $484M
2029Q3E $499M
2029Q4E $514M
2030Q1E $529M
2030Q2E $546M
2030Q3E $562M
2030Q4E $579M
2031Q1E $597M
2031Q2E $615M

Assumptions & reasoning

  • Modelled on contracts traded x revenue per contract because those are the two numbers Robinhood actually publishes monthly, which makes every quarter of this line checkable against a press release rather than against a forecast.
  • The unit is a MILLION contracts, not a contract: 774 units at $442,000 each. Same arithmetic, but it keeps the number at a scale a reader can move.
  • July 2026 alone was 324.2 million contracts, up 2% on June and 66% year over year - a 973 million pace for the September quarter. This line assumes 820 million, so it deliberately does not extrapolate a single strong month.
  • Revenue per contract drifts down 0.5% a quarter. Rebates are negotiated, order flow is competitive, and the direction of regulatory pressure on payment for order flow has only ever been one way.
  • The risk here is not volume, it is the rate: a ban or a cap on payment for order flow takes most of this line's revenue and leaves all of its volume.
HOOD model map

Explore another vertical